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Safer Sweatshops

July 8, 2013 1:32 pmJuly 8, 2013 1:32 pm

A long, long, long time ago I used to believe that the central political and economic debate facing our nation was going to be about globalization — not realizing that it would instead revolve around a powerful
movement to roll back the clock here at home, and bring back the Gilded Age. (As I once said, I think to Robert Kuttner, while he and I were arguing about tariffs, Sauron was gathering his forces at Mordor). Anyway,
back then, as a columnist for Slate, I wrote a piece arguing that low wages and poor working conditions by Western standards were necessary and inevitable in poor countries — provoking the predictable outrage.

All these issues have faded into the background, but they’re still out there — and the Bangladesh factory horror has bought some of them back to prominence. And there are now serious moves to impose stricter safety and working conditions standards in third-world apparel producers. So what’s my view?

The answer is, I’m all for them — and no, I don’t think that’s a contradiction of my earlier views.

It remains true that given their low productivity, countries like Bangladesh can’t be competitive with advanced countries unless they pay their workers much less, and provide much worse working conditions too.
The Bangladeshi apparel industry is going to consist of what we would consider sweatshops, or it won’t exist at all. And Bangladesh, in particular, really really needs its apparel industry; it’s pretty
much the only thing keeping its economy afloat.

At this point, however, there really isn’t any competition between apparel production in poor countries and rich countries; the whole industry has moved to the third world. The relevant competition is instead
among poor countries — Bangladesh versus China, in particular. And here the differences aren’t as dramatic: McKinsey (pdf) estimates Bangladeshi productivity in apparel at 77 percent of China’s level.

Given this reality, can we demand that Bangladesh provide better conditions for its workers? If we do this for Bangladesh, and only for Bangladesh, it could backfire: the business could move to China or Cambodia. But
if we demand higher standards for all countries — modestly higher standards, so that we’re not talking about driving the business back to advanced countries — we can achieve an improvement in
workers’ lives (and fewer horrible workers’ deaths), without undermining the export industries these countries so desperately need.

So, can we act to improve the lot of workers in low-age, labor-intensive manufacturing? Yes, we can, as long as the goals are realistic and the measures appropriate in scale. And we should go ahead and do it.